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PT SMI disburses $1.88b in regional loans in Q1
The company is shifting its financing focus to the regions to reduce their reliance on state coffers.
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A section of the trans-Sumatra toll road is under construction on Dec. 12, 2021 in Pulo Kerto village, Palembang, South Sumatra. (Antara/Nova Wahyudi)
S
tate-owned infrastructure financing company PT Sarana Multi Infrastruktur (SMI) has said it experienced "significant" outstanding loan growth in the first quarter as eased COVID-19 curbs allowed regions to resume infrastructure projects.
SMI recorded Rp 27 trillion (US$1.88 billion) in outstanding loans for regional administrations in the January-March period, up 132.2 percent from the same period last year and accounting for 34 percent of its financing portfolio.
SMI president director Edwin Syahruzad said most of the funds were sourced from the national economic recovery program (PEN).
“Financing the activities of local administrations are a source of growth amid [the pandemic slump] faced by corporations, which are the cornerstones of Indonesia’s infrastructure development,” Edwin told an online press conference on Thursday.
SMI has been shifting its focus toward financing regional administrations to reduce their reliance on government funds and locally generated funds (PAD) to pay for development projects, because they lacked awareness of alternative funding options.
Read also: SMI looks to increase financing for local governments to reduce dependence on state budget
The company started using a specific directorate this year to handle regional financing, and noted that 63 percent of the loans disbursed in March went to regions outside Java.
